dyeing unit

[satbir singhwahi]

dyeing unit doing cloth and garment dyeing whether subject to service tax or excise.

[Rajagopalan Ranganathan]

Sir,

As per chapter Note 4 of Chapter 52 of the first schedule of Central Excise Tariff Act, 1985 dyeing of cotton fabrics amounts to manufacture. similarly dyeing of nylon fabrics amounts to manufacture vide Chapter Note 4 of Chapter 54 of Central Excise Tariff. Therefore you are liable to pay excise duty only. No service tax is leviable.

[Mahir S]

Yes, dyeing of clothes and garments shall amount to manufacture as explained above.

Service tax shall also not be applicable as it has been specifically exempted under the mega exemption notification no. 25/2012 dated 20.06. 2012 - S.T.

AI Summary

Manufacture by dyeing of fabrics triggers excise liability while service tax is excluded under the stated exemption.
Dyeing of cotton and nylon fabrics constitutes manufacture under Chapter Note 4 to Chapters 52 and 54, so cloth and garment dyeing attract excise duty and not service tax; service tax is further excluded by the cited mega exemption notification no. 25/2012.